Thursday, December 3, 2015

As
long time followers of the Smashwords Survey know, we examine real
sales data to extract potential insights about best practices that give
indie authors and publishers incremental advantages in the marketplace.

You want to reach more readers. This Survey might help.

First,
an apology of sorts. I first shared the survey results you are about
to learn in the embedded presentation below at the RT Booklovers
conference in Dallas in May. Despite my best intentions to publish this
soon after here on the blog, I'm tardy in bringing you the full
results. But here today for your reading pleasure, today I hunkered
down, turned off my email and locked myself in a room until it was
completed. Whew!

Although I'm bringing this to you
later than expected, for followers of the blog, I've already been
previewing the most important findings here in my regular blog posts
since May.

The survey is based on over $25 million in
actual verified ebook sales data, aggregated across the Smashwords
distribution network between April 2014 and March 2015. During this
period, the following retailers and library partners contributed sales
data in the form of sales reports for Smashwords books: Apple iBooks,
Barnes & Noble, Kobo, the Smashwords Store, Scribd, OverDrive,
Amazon (a small subset of our titles), Baker & Taylor Axis 360,
Blio, Oyster, Flipkart and Inktera.

At first glance,
one might think this data is dated. Yes, it's coming to you nearly six
months after it was first released, but I think if you take a look
you'll see that it contains some important nuggets that will help you
increase the visibility and sales of your books, as well as new findings
that might help you either reinforce or evolve your views on certain
best practices.

The Survey reveals a couple industry
firsts (see the summary of findings below the embedded presentation
below) that will help Smashwords authors and publishers publish with
greater professionalism and success in the months ahead.

For
students of the Smashwords Survey who wish to take the time, there's
also much to be learned by viewing the results within the larger context
of our prior surveys (View our prior surveys here: Smashwords Survey 2014 | Smashwords Survey 2013 | Smashwords Survey 2012 ). It's almost as interesting to observe what hasn't changed as it is to observe the new findings.

Several of the new findings are enabled by tools we've released over the last couple years including the Smashwords Series Manager which allows us to look closer at the factors driving series performance, and Smashwords Preorder Distribution
which was first announced in 2013 but has now given us a wealth of
information we can now mine and share. And looking ahead to the
Smashwords 2016 Survey which we'll release in six months, our new enhanced metadata for box sets will allow us to share new insight about box set performance.

Here's the Slideshare deck. Please feel free to embed it in your own blog or share it with a friend. You can also view it at Slideshare here, where you find additional links to share it or download it.

Key Findings of the 2015 Smashwords Survey

1. Wow, preorders.
For the first time we analyzed the percentage of books born as
preorders (as opposed to simply uploaded the day of release) and
compared the sales of preorder-birthed books to non-preorder books.
During the survey period, less than 10 percent of books were born as a
preorder, even though this feature has been available to Smashwords
authors since mid 2013. Yet despite the low usage, two thirds of our top 200 bestselling titles were born as preorders.
That's right folks. That small tiny minority of preorder books
accounted for the majority of our bestsellers. On a median basis,
ebook born as preorders earned the authors 3 1/2 times more income than
books that were simply uploaded the day of release. The average was
even more stunning. The survey contains a full page of caveats about
these numbers and why I think they're exaggerated so I hope you take the
time to read that. The bottom line, however, is that about 90% of
indies are failing to take full advantage of this amazing tool. If you
don't have your next 12 months of planned releases listed as preorders
today, then you're leaving readers and money on the table. I'll go a
step further: Preorders are such an essential best practice that it's
simply dumb not to take the time to learn how to use them to your
advantage. I make it easy to learn because I've written multiple
article on preorder best practices. Learn more about our new Assetless Preorder feature here, access the Smashwords preorder page here (includes links to my blog posts on preorders) or check out my NEW article I wrote last month on ebook preorder strategy for Publishers Weekly.

2. Series with free series starters earn more money.
For the first time we analyzed the difference in sales between series
with free series and starters and series without free series starters.
We looked at our 200 bestselling series with a free series starter and
our 200 bestselling series without free series starters. Then we added
up the numbers and compared them. First we looked at the average. The
free series starter group earned 66% more. Impressive. And then,
assuming that maybe a few big sellers were skewing the average, we
looked at the median. The median is the midpoint if you arrange the
sales results from highest to lowest. Often in big data sets, the
median can give you a more typical result. The result? Exactly the
same! The median title in the free series starter group earned 66%
more. This is the strongest quantifiable evidence that I'm aware of to
date that proves what many of our authors already know by personal
experience over the last several years. If you write series and you
haven't yet experimented with perma-free series starters, then give it a
try!

3. Free still works to build readership.
For each survey year, we've looked at how free ebook downloads compare
to paid downloads using iBooks as our apples to apples comparison each
year (bad pun, sorry!). In the 2014 Survey, we found that free books
got 39 times more downloads than priced books, down dramatically from
91x in 2013 and 100X in 2012. I expected the power of free to fall
further this year, given that this secret - which I've been advocating
for nearly eight years - helps authors earn more money. The result for 2014? 41x.
The effectiveness of free increased despite the glut of free books. I
think a couple things are going on here. First, I think more and more
readers are using free as their primary discovery path to try new,
unknown-to-them authors, especially with free series starters. Second,
iBooks, more than any other retailer, provides amazing merchandising
support for free books and free series starters. Third, it's a
multi-step path to build a loyal readership of superfans who will buy
everything you write. Superfans are your evangelists. They trust
everything you write to be super-awesome. You earn them one by one,
word by word. If you reverse engineer the trust building process, it
starts with discovery which leads to a reader trying you for the first
time, and then your book must earn the reader's continued attention from
word one forward. A free book allows a reader to try you risk free,
and if you're offering them a great full length book, that's a lot of
hours the reader has spent with your words in which you're earning and
deserving their continued readership. Free works!

4. Longer books sell better than shorter books.
This finding is consistent with each of the prior year's surveys,
though as I mention in the presentation, this year's finding comes with a
lot more caveats. In a nutshell, I suspect the rise of multi-author
box sets, often at deep discount prices, is probably throwing off the
data this year, and as I discuss in the presentation, some of the
dynamics will cause it to understate impact of longer books and some
will cause it to overstate it.

5. $3.99 remains the sweet spot for full length indie fiction.
For the third year in a row, authors sold more units and earned more
overall income with books priced at $3.99. This is significant because
it counters the concern of some authors that the glut of high-quality
will lead to ever lower prices. For great authors, readers are still
willing to pay. The pricing, earnings and unit sales data we share has
been remarkably consistent now for four years, expecially when you
consider how this translates to a competitive advantage for indie ebook
authors compared to traditionally published ebook authors. Indies still
have the ability to price lower, net more per sale and reach more
readers thanks to the lower pricing. But traditional publishers are now
making greater use of lower pricing, so this advantage will diminish in
the years to come (more on that in my 2016 predictions to come).

6. 99 cents is still good for building readership,
but not as good as $2.99 and $3.99. And from an earnings perspective,
99 cents underperforms the average of all other prices by about 65%.

7. Avoid $1.99.
For the fourth year in a row, $1.99 was a black hole in terms of
overall earnings. On a unit sales basis, although $1.99 books
outperformed all books priced $5.00 and above, it dramatically
underperformed on overall earnings, earning 73% less than the average of
all other price points. If you write full length fiction and you have
books priced at $1.99, trying increasing the price to $2.99 or $3.99,
and if your book performs as the aggregate does, you'll probably sell
more units. Or if it's short and $2.99+ is too high, try 99 cents
instead because the data suggests you'll earn more and reach about 65%
more readers. I'm not entirely certain why this is the case. It's not
because our retailers pay lower levels for sub-$2.99 books. They
don't. Our retailers pay the same for $1.99 as they do for $9.99.
There's something about the price point that readers don't like. Who
knows, maybe readers see 99 cents as an enticing promotional price,
$2.99 and up as a fair price, and $1.99 as the price for lesser quality
books that couldn't make the $2.99 grade. Your theory is as good as
mine.

8. Bestselling authors and social media.
Bestselling authors are more likely to have a presence on Facebook and
Twitter, and more likely to have a blog. Not a huge surprise, though
it's worth noting there are plenty of successful authors who have
minimal presence on social media.

Notes and cautionary caveats about the data

I want to help you be as informed as possible, and that includes helping you
understand the potential limitations of the data and our findings.

The data above is aggregated across multiple
Smashwords retailers, library partners and the Smashwords Store. I'm
not aware of any other survey that is based on such a large volume of
real, verified sales. For this reason alone, some of this data has a
potential weight and statistical significance that is much more useful
than the anecdotal data learned from one's own personal experience, from
friends
and from Internet heresay. But as such, the is not without its flaws
and limitations, and it does not invalidate your personal experiences
because every author and every book is different.

iBooks
and Barnes & Noble are our largest ebook sales channels, so you can
assume these stores had an outsize impact on our results.

Smashwords
sales are heavily skewed toward fiction (as is the entire industry) and
romance (romance is huge in ebooks, but I expect our exposure to
romance is greater than most traditional publishers). Therefore, if you
write non-fiction, some of these findings will be useful and some may
be less relevant.

Smashwords offers a massive catalog
approaching 400,000 books, and most of these titles are over one year
old. Most books get the lion's share of their sales in the first few
months (one reason Amazon KDP is a three month cycle). In this Survey,
we don't different titles by age (but maybe we should in future
surveys!).

Numbers are dangerous. Although averages and
medians can give you useful information, your book may not conform to
the average or median. So use caution when basing your publishing
decisions on these findings. The best price point for the aggregate of
indie ebooks may not be the best price point for your book. Your book
is unique. Use this data as one of only multiple inputs that you use in
your decision process.

Correlation does not necessarily
equal causation. Just because we see patterns in the data doesn't mean
that one thing caused the other. As is the truth in all life, there
are typically dozens or hundreds of factors that can conspire to create
certain results, and it's nearly impossible to capture these factors in
data alone. For example, longer books often sell better than shorter
books. That doesn't mean that it's impossible for your short novella to
hit the New York Times bestseller list, nor would such a wonderful
occurrence invalidate the usefulness of our data.

This was our first Survey year where subscription ebook services
became a factor in the market. Between Scribd, Oyster and Kindle
Unlimited, subscribers to these services aren't necessarily exposed to
the price of the book, which means retail price isn't a decision factor,
and we don't separate out subscription sales from our data set. It
means some of the pricing data is potentially skewed.

Although
we include some sales data from Amazon, it's only for a small
subset of our catalog, and none of these titles were enrolled in KDP
Select or Kindle Unlimited. Therefore, although most of our findings
will be useful to Amazon authors, it would be most accurate to think of
these findings as more relevant to the non-Amazon retailers.

We're
looking at a snapshot of data over a 12 month period, and I'm bringing
it to you six months later. The implications of this are discussed
above.

So that's it! I hope you enjoy the Survey. I'll
release the 2016 Smashwords Survey at RT Booklovers in Las Vegas in
April, and next year I'll try to get the Survey out quicker for all to
see.

Mark, it's a mix. We've seen prior bestsellers sell more with preorders, but we've also seen many of our authors top the charts for the first time with the assistance of preorders. There are multiple benefits of preorders such as enabling more effective advance marketing and higher sales rank on the day of release at iBooks/Kobo (see the links above to some of my articles for more) that conspire together to help books born as preorder books sell better. We're seeing a lot of our more disciplined bestsellers listing assetless preorders nine to 12 months in advance, even before they've started writing the book. For disciplined authors who can plan ahead and meet their deadlines, assetless preorders are a godsend.

Now, what would be interesting is to learn,how things are going with non-English books. But I suppose, there are not enough being sold through Smashwords, as you still don't allow local prizing, so that it's jsut more convenient to use local distributors.

Thanks a lot for this report, Mark. Very interesting. I have a question about your statement "Bestselling authors are more likely to have a presence on Facebook and Twitter, and more likely to have a blog.". Is that more likely than non-bestselling authors? Or does that mean that from all of the bestselling authors in your sample, most of them have a FB and Twitter presence. Because if it is the latter, I suspect that that is also the case for non-bestselling authors. In other words, if you randomly pick a number of authors (bestselling or not), I'm fairly sure that most of them will have social media presence.

My question is: how many of the authors understand how to use their books as the BEGINNING of their revenue streams and not the end of them? I make more than 90% of my money from products and services I sell after my book.

Thanks for the survey.I'd like to see data on how many "free" downloads actually made money. Saying Free was 41x more than priced just says people don't want to pay for anything, a long established bad habit on the net. I want to know how many people who give their books away ever make money.I've had my kids books on Smashwords for several years now, both free and priced and to date my only sales are from printed books. That may also just be that readers like kids books in print.

J, if you click to the Slideshare page at http://www.slideshare.net/Smashwords/2015-smashwords-survey-how-to-sell-more-ebooks you'll see a button where you can download the full presentation. That will help you view the few words that get obfuscated or truncated by the web version of the Slideshare presentation on some of the slides. And in answer to your question, the full paragraph reads, "Some findings are useful, some not. Some of the data provides hints to the most important best practices."